Texas' job market: The long and short of it

Texas posted relatively strong job growth in June, and the state’s economy seems well-positioned for the long haul, according to two economic reports released Tuesday.

Texas added 10,700 private sector jobs in June, according to a survey by payroll processor ADP. The jobs gain was a decent showing for the Lone Star State, but fell far short of the 26,900 private-sector jobs added in California and the 14,600 added in Florida.

In Texas, gains of 2,600 jobs in the professional services industry and 1,400 jobs in trade, transportation and utilities were offset by losses of 1,900 jobs in manufacturing and 2,700 jobs in natural resources/mining, which includes oil-and-gas industry losses, according to the ADP report. Nationwide, private-sector employment increased by 172,000 jobs in June.

Looking forward — way forward — the latest forecast for the Texas economy by Waco-based The Perryman Group indicates healthy long-term growth.

“Business cycles are inevitable, but the stage is set for growth outpacing most parts of the United States,” the report says.

About 6.2 million net new jobs are expected to be added between now and 2040, a 1.64 percent yearly pace which will put total employment in 2040 at more than 18.5 million.

If my math is right, The Perryman Group’s projection works out to 21,000 jobs a month, give or take, for the next 24 years. The job gains will be concentrated in the services and trade sectors, and the numbers of jobs in all major industry groups are forecast to rise.

A big reason for the state’s continued success is its increasingly diverse economy, the Perryman report says. The report cites major 2015 and 2016 relocation and expansion projects in Texas that cover an array of industries — automotive manufacturing (including Toyota in Plano and General Motors in Arlington), technology (including the Facebook data center in Fort Worth), petrochemicals, distribution centers, financial services, health care, aerospace, and others.

Even the beleaguered energy industry is improving, reports economist Ray Perryman, president and CEO of the group that bears his name. Oil prices have recently begun to move slightly upward, propelled by global oil supply disruptions, rising oil demand, and falling domestic crude oil production, he notes.

“The state’s resilience in the face of dropping crude oil prices is another reason I’m feeling more positive about future prospects,” Perryman wrote in the report. “The sharp decline in oil prices and resulting scaling back of drilling and exploration had a decidedly negative effect on the Texas economy, but the end of $100 oil was not catastrophic.”

On the downside, Texas needs to deal with changes in the state population, which will expand by about 12 million through 2040 and grow older and, most likely, sicker, Perryman’s report says. The implications for infrastructure, education, health care systems and social services are profound and need immediate attention, lest the state risk slower economic growth and the need to commit ever more resources to public needs, Perryman warns.